In Thailand, personal income tax is calculated based on progressive tax rates applied to the taxable income of individuals. The calculation involves the following steps:
- Determination of Gross Income: All types of income earned by an individual, including salary, wages, bonuses, rental income, interest income, dividends, and capital gains, are aggregated to calculate the gross income.
- Deduction of Allowable Expenses: Certain expenses, such as contributions to the Social Security Fund, Provident Fund, and specific deductible expenses, are subtracted from the gross income to arrive at the taxable income.
- Application of Tax Rates: The taxable income is then subject to progressive tax rates, where different income thresholds are taxed at progressively higher rates.
- Calculation of Tax Liability: The tax liability is determined by applying the applicable tax rates to the taxable income after deductions.
The following table illustrates the applicable tax rates for personal income tax in Thailand:
| Taxable Income (THB) | Tax Rate (%) |
|---|---|
| 0 - 150,000 | 0 |
| 150,001 - 300,000 | 5 |
| 300,001 - 500,000 | 10 |
| 500,001 - 750,000 | 15 |
| 750,001 - 1,000,000 | 20 |
| 1,000,001 - 2,000,000 | 25 |
| 2,000,001 - 5,000,000 | 30 |
| Above 5,000,000 | 35 |
Taxable income in Thailand includes all types of income earned by an individual, such as:
- Employment income
- Business income
- Rental income
- Interest income
- Dividend income
- Capital gains
- Other sources of income
Various deductions and allowances may apply to arrive at the taxable income, including deductions for contributions to social security funds, personal allowances, and specific deductible expenses.
Certain types of income are exempt from taxation in Thailand, including:
- Income from government bonds
- Scholarships and grants
- Gifts or inheritances received from close relatives
- Certain allowances or benefits provided by employers, such as housing allowances and medical expenses
These exemptions are specified in the Thai Revenue Code to encourage savings, investments, and social welfare.
The primary legislation governing personal income tax in Thailand is the Thai Revenue Code, particularly Sections 37 to 48. These sections outline the tax rates, taxable income, deductions, and exemptions applicable to individuals.
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